Finance & Treasury Centre Incentive

Establishing a Financial Treasury Centre (FTC) serves as a pivotal strategy for companies aiming to bolster their growth trajectory and streamline their cash management practices. Typically, these treasury centers are implemented when companies attain a specific scale, global presence, and encounter increased complexity in their treasury operations, particularly within Multinational Corporations (MNCs). However, smaller-sized enterprises, along with diverse market players such as insurance companies, asset owners, and asset managers, can also reap substantial benefits from comparable structures. The Finance and Treasury Centre Incentive in Singapore serves as a government-led initiative designed to enhance the city-state's appeal for a greater influx of FTCs. This article aims to provide an overview of this incentive, highlight its benefits, outline the eligibility criteria, and explain the application stages.

Topics To Be Discussed

Key Facts about the FTC Incentive

Benefits of the Singapore FTC Incentive

Eligibility Criteria for the Finance & Treasury Centre Incentive

How to Apply for the Finance & Treasury Centre Incentive

Key Facts about the FTC Incentive

The Finance and Treasury Centre Incentive, facilitated by the Singapore Economic Development Board (EDB), is a targeted initiative designed to foster the development of robust treasury management capabilities and encourage Singapore companies to establish the finance and treasury centers. Leveraging competitive tax rates and withholding tax exemptions, this incentive aims to establish Singapore as the top choice for conducting comprehensive treasury operations within the region.

Tax credit Amount

Concessionary tax rate of 8%

Timeline

The evaluation period can vary but typically takes several weeks to a few months.

Key Requirements

1. Company registered in Singapore and tax resident here;

2. FTC activities

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Benefits of Singapore Finance & Treasury Centre Incentive

The FTC Incentive offers a range of advantages to approved FTC companies, facilitating their operations and growth within the financial landscape. Here's a brief overview:

Tax Rate Reduction: Eligible FTC companies can benefit from a reduced corporate tax rate of 8% on income derived from qualifying FTC services provided to Approved Network Companies (ANCs), along with income from approved qualifying FTC activities.
Withholding Tax Exemption: The incentive provides a withholding tax exemption on interest payments, such as interest on loans obtained by the approved FTC from various financial institutions outside Singapore, under the condition that the funds are utilized for approved qualifying activities or services.
Duration and Extension: The incentive period spans five years, with the possibility of extension subject to the FTC company's commitment to further expand its FTC activities and services.

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Eligibility Criteria for the FTC Incentive Singapore

For companies seeking to take advantage of the FTC Incentive, certain eligibility criteria must be met. The following key points outline the prerequisites for approval:

Singapore company: An applicant should be a company incorporated in Singapore.

Substantive activities in Singapore: Engage in substantive activities in Singapore and undertake strategic functions

Quantitative and qualitative aspects: Evaluation of applicant companies will encompass both quantitative and qualitative aspects of the proposed FTC operations

Larger presence: Typically, an FTC is integrated within a larger presence of a company in Singapore, which may involve manufacturing, R&D, or various headquarters activities.

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How to Apply for the FTC Incentive

To access the FTC Incentive, companies must follow a systematic application process. Here is a step-by-step guide:

Through the FTC Incentive, businesses can fortify their treasury management operations and leverage the strategic benefits offered by Singapore's robust financial ecosystem. By capitalizing on the tax incentives and conducive regulatory environment, companies can establish sustainable and thriving FTC operations within the region, fostering long-term growth and success.

How We Can Help

At CorporateServices.com, we understand the importance of navigating the grant application process effectively and maximizing the benefits of Singapore Government Incentives. Our dedicated team is here to provide comprehensive assistance and support to ensure a seamless application experience. We will assist you in preparing and organizing all the necessary documentation and information required for a successful application. We can help streamline the process, saving you time and effort. Discover more about our Incentives services and how they can benefit your business.

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This series of articles regarding Singapore government incentives was prepared by CorporateServices.com, a leading Singapore-based corporate service provider. We offer a range of services for private limited companies in Singapore. Our team of experienced experts provides Singapore company registration and other incorporation-related services through our cutting-edge online platform.

Contact us if you need assistance with setting up a new Singapore company or would like to transfer the administration of your existing company to us.